Artificial Intelligence in Healthcare: Real Opportunities

Healthcare and AI

Doctors have always been a little cautious about the “worried-well” diagnosing themselves with fantastic ailments using the web. Increasingly, though, it seems there’s a solution: Cut out the middle-man.

Artificial intelligence in healthcare is growing rapidly. Across diagnosis, research, prevention and treatment, AI solutions are promising a revolution. The next big name in healthcare may, in fact, be Google: The company’s DeepMind AI business is in partnership with a number of NHS trusts, helping see if its technology can spot early signs of eye conditions that doctors would miss, for instance. Wearables maker Fitbit, meanwhile, is connecting with Google’s dedicated healthcare cloud so doctors can easily access data from its wearables.

In fact, there’s countless ways AI could transform healthcare, across every part of healthcare, and there are ever more businesses serving the sector. It’s not just governments and healthcare businesses that could benefit. AI could also help businesses to build healthier workforces and improve employees’ well being, getting them diagnosed and treated more quickly, and healthy and back to work faster. It could even help encourage them to live healthier lifestyles to prevent them getting ill: A worthwhile investment for many businesses.

Data security

Digital Security and data protection. Conceptual illustration with advanced technology digital display.

The technology doesn’t just promise new treatments and innovations. It also gives us the opportunity to do the same things more cheaply; it’s been suggested it could cut the soaring costs of drug development for pharmaceuticals businesses, for instance. Researchers could generate accurate hypotheses faster, “making the drug discovery process less expensive and more effective”, according to one data and analytics company director.

All technology brings challenges, though, and AI is no exception. We’re already seen the UK’s Information Commissioner’s Office, for instance, rule that DeepMind’s partnership with one NHS Trust breached the Data Protection Act. There are outside threats, too, as last year’s Wannacry ransomware attacks showed, affecting not just PCs but connected medical equipment such as MRI scanners and blood testing devices, too. As connected technology becomes ever more ubiquitous in healthcare, the potential disruption grows.

Not surprisingly, it’s not just data regulators businesses who are interested in AI; the FDA in the US is already taking a keen interest in the regulation of AI applications in healthcare.

AI and the supply chain

3d rendering android robot control forklift truck

None of this diminishes the potential of AI in healthcare, but it’s a reminder that the sensitivity of data and dangers involved warrant special protection for the field. It should also serve as a reminder for businesses to look to the low hanging fruit as well.

There will definitely be powerful applications of AI developed that overcome the challenges of privacy and security. But there are also applications that often don’t involve such sensitive data but could still have a significant impact on the business. The supply chain, for instance, is likely to be another key area where AI can make a real difference, and it’s already being used to cut shipping times and costs; yet there’s not widespread adoption.

As AI develops, it should make supply chains faster, more efficient, more robust and transparent. Businesses that want to make the best use of the technology will need to look to every part of their business, and grab the opportunities where they find them.

The blockchain supply chain in pharma

Man in chemicals warehouse with hard hat and clipboard checking stock

Is blockchain the new supply chain, as some are claiming?

Certainly, there’s a good deal of hype around the technology. Touted as everything from the future of banking to farming, it’s easy to be cynical, particularly since the rhetoric to date has far outrun the practical applications of the technology that we’ve actually seen, beyond bitcoin.

But blockchain does seem an extremely good fit for modern, complex, widely distributed supply chains. The technology provides a method for securely recording, storing, and verifying transactions. Crucially, though, it uses a distributed ledger (a database) – with the records of data and transactions stored across a network of computers rather than centralized, with the database accessible for users to review, without being able to alter or delete records.

It’s “a way for one internet user to transfer a unique piece of digital property to another internet user, such that the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer”, as American entrepreneur Marc Andreessen has put it.

Another way to look at it is that blockchain “democratises” access and therefore validation of records. In the supply chain for instance, it could bring transparency so consumers could see in one place a record of every time a product changed hands. As this article puts it: “Before blockchain, much of this vetting responsibility was delegated to the retailer. Now, the policing power has been placed into the hands of the person that matters most: the buyer.”

Blockchain in pharma

Close up of blue pills against white background

That’s perhaps not a concept that sounds like it might sit so safely in the pharmaceutical supply chain, but blockchain pharma, as well as blockchain healthcare more generally, could soon be a reality. The key characteristics of the blockchain – transparency, security and reliability – have obvious benefits. In fact, some argue that healthcare could be the biggest adopter of the technology after financial services.

In the pharma supply chain, the technology could be particularly powerful in tackling counterfeiting. The generally recognised protection method is serialisation, which is in the process of being mandated by regulators. In the US, for example, the Drug Supply Chain Security Act in 2013 gives the industry until 2023 to implement unit-level track-and-trace systems for products across the supply chain. That simplistically involves unique identification and tracking of product at an individual unit level, with electronic verification of that pack finally going into the hands of the patient at point of service.

In the UK, meanwhile, the challenge of tracking the journey of individual product packs through the end of the supply chain is being addressed by innovations in labelling technology.  For instance, the ReMediES project - which we are proud partners in - is a collaboration between industry and funded research and one of its applications includes developing smart technology to track the quality of a pack throughout its lifetime.

Blockchain, though, could bring more granularity and transparency to the process, and help businesses meet increasing regulatory requirements.

Whether blockchain will prove the answer to counterfeiting in the supply chain remains to be seen, what is clear is the desire for transparency. And, with each technology development, expectations on the industry in that respect are only going to grow.

New Business Interruption Insurance for Pharma

image of red and white capsules arranged to make up a world map

Crucial cover for pharma with new business interruption insurance

We’ve seen all too often the disruption events such as extreme weather can bring to pharmaceutical production, but it doesn’t always require a natural catastrophe to shut things down. The end-point of regulatory risk is also often lost production while businesses are forced to remediate problems by regulatory sanction or the threat of it.

And, while the hurricane season is geographically confined, businesses operating in possibly the world’s most heavily regulated sectors can be hit wherever they are. Enforced and pre-emptive shutdowns due to manufacturing deficiencies are estimated to have cost pharma businesses about $10 billion since 2001.

For the most part, it’s a cost they have had to bear alone.

Uninsured losses

image of black downward arrow against a backdrop of money showing business losses

Unlike fires, floods and storms, regulatory risks are not covered by standard business interruption (BI) policies related to property damage. For cover, the interruption usually has to be the result of insured risk, and insurance don’t usually help with regulatory fines as a matter of public policy.

Nor will the losses necessarily be picked up by other policies. As this post explains, one recent case saw a producer with suspected contamination at its manufacturing site unable to claim even under its business interruption cover for extortion property damage: With no actual extortion demand materialising, the interruption was solely the result of a regulatory order to suspend production until the site could prove a quality control process preventing tampering with capsule batches.

Likewise, Contaminated Products policies often have restrictions that prevent a claim for regulatory interruptions.

Introducing  non-damage business interruption (NDBI) 

It’s these gaps that a new Non-Damage Interruption Policy for the pharmaceuticals sector from Munich Re, which we’ve working with, seeks to address.

It covers the complete or partial shutdowns of production on the orders of regulatory authorities, and even instances where companies suspend production to pre-empt a forced closure and protect brand and reputation.

It’s another valuable tool in mitigating the risks that pharma businesses face – and plugging a gap in coverage that’s existed for too long. As with any insurance, though, to see its value and apply it properly, businesses first have to identify and understand their risks. As one of the first businesses to take up the policy explains in the Munich Re post, that means starting by modelling exposures and quantifying supply chain risks. And that, of course, is what we’re all about.

SCAIR Product Summary - Supply Chain Risk Management Software

As of 2016, the downloadable Product Summary for SCAIR highlights the features of latest iteration of this award winning SCRM / Supply Chain Risk Management Software.

SCAIR is used by some of the world's largest Pharmaceutical and other manufacturing organisations, not only to determine and mitigate value at risk, avoiding global profit fluctuation, but also to assist with liquidity analysis and Corporate Governance.

Product Summary - Supply Chain Analysis Interruption Risks (SCAIR) - Award winning SCRM Software

Disrupting Big and Mid Pharma: Pharma's Crippling Addiction and How to Cure it

Challenging Big and Mid Pharma Industry paradigms

A superb new book: Find It, File It, Flog It: Pharma's Crippling Addiction and How to Cure it, includes expert witness from Catherine Geyman of Intersys.

Hedley Rees issues his challenge to the Drug Industry paradigms and orthodoxies, calling for a wholesale and radical reappraisal of an arguably outdated and inefficient Research and Development Value Chain and Supply Chain model.

This necessarily irreverent, but highly insightful, new book from the highly respected Rees, aims to disrupt and transform a model which has remained essentially unchanged since the 1950s.

SCAIR Secure SAAS (Software As A Service) Cloud Hosting

SCAIR (Supply Chain Analysis of Interruption Risks) is available as a Cloud Hosted  Software As A Service model.

You can expect your Supply Chain Risk Management provider to take data security seriously and we work hard to ensure that sensitive data is treated with care and respect.

We use Tier 1 Enterprise hosting, which complies with stringent security standards, as well as providing excellent service quality SLAs (Service Level Agreements) to ensure great resilience of our service to you.

Our preferred Cloud Services Enterprise hosting:

Risk Management Perspectives Part 3: enterprise wide information gathering and supply chain tools

The final installment to a Q&A series, generated following a prominent Risk Management publication's request for industry expert opinion.

q. "What tools can companies use to manage their supply chains and ensure they have up-to-date information on their whole extended enterprise?"

a."For a multi-national organisation, the risk management of thousands of suppliers is not practical unless a prioritisation method is applied. This method should not be based purely on volume of spend; a more robust approach to SCRM is needed which should include quantification of financial exposure to all critical supply points (both internal and external, and 1st tier and Xth tier suppliers).

Having built up a detailed picture of critical supply points, and taken steps to reduce key exposures, the final step is to monitor the status of those locations. In a recent KPMG report entitled ‘Enhancing supply chain networks for efficiency and innovation’ only 9% of the respondents said they could assess the impact of disruptions within a matter of hours. The 9% have a competitive advantage by being able to respond quickly to failures in their supply chain. In our data rich world, there are many information feeds ranging from natural hazard alerts to financial monitoring, which can help supply chain managers to stay on top of the status of critical supply points."

Risk Management Perspectives Part 2: challenges and Risk Management in global supply chains

The second part of a series in which Catherine Geyman, of Intersys Risk, answers questions posed by a prominent Risk Management publication.

q."What are the challenges to managing the risks a modern, global supply chain presents? Can you give any examples specific to your own experience?"

a."Two of the biggest challenges for global companies with complex supply chains are i) lack of visibility of the actual manufacturing source (particularly in Tier 2, or 3 suppliers) ii) the ability to prioritise and focus on managing the most critical supply chain exposures based on value at risk; this is a particular challenge for complex multi-nationals with thousands of key suppliers.

Examples:
i) Lack of visibility of the End to End supply chain. When a fatal explosion occurred in a German manufacturing plant in 2012, the automotive industry felt secure that it had alternative sources of nylon-12, but it was unprepared for the loss of a precursor to nylon-12, cyclododecatriene (CDT) made at the same plant. The whole industry was dependent on CDT production from that plant and its impairment caused a shortage of nylon-12 which continued for months.

ii) A large pharmaceutical manufacturer sourced a particular grade of lubricant (used in tablet formulation of a wide range of its key products) from a sole source. As it was an inexpensive material, bought in relatively small quantities, it was not a management priority for Procurement. However, when the value at risk on this supplier was analysed it was realised that a major problem there would result in significant supply interruption across a range of products. In this instance, the solution was straightforward – a relatively small investment in a manageable volume of safety stock would mitigate the majority of the exposure."

Risk Management Perspectives Part 1: are we learning from recent Supply Chain experiences?

Catherine Geyman, of Intersys Risk, was asked by a prominent Risk Management publication to give her opinion on a number of topical issues. The publication summarised and, for clarity, her full answers are shown below.

q: Have lessons been learned from the issues emanating from the Thai floods and the horsemeat scandal?

a: "Certainly the horsemeat scandal has put a greater emphasis on understanding the true source of a material. A common problem across both the Food and Life Science industries is in pinpointing where a material is actually made when so many are sourced through agents and distributors. A similar provenance problem was experienced by the pharma industry in 2008 when the heparin scandal broke and it became obvious that a number of significant western manufacturers had no idea of the origin of the starting material – pigs intestines harvested in tiny, unregulated workshops across China. That particular issue put pressure on western regulators to increase their presence overseas and since then the US Food & Drug Administration has opened more centres in overseas locations which in turn have resulted in a greater number of inspections of foreign facilities and an increase in regulatory actions preventing non complying drugs and foodstuffs from entering the US.

From an internal controls point of view, the pressure to extend auditing activities further back up the supply chain has increased and the auditor’s skill set has been redesigned in an attempt to better detect fraudulent supply chain activities. There has also been a push in the food sector to simplify the most complex supply chains and to exploit more opportunity to source locally. The Food industry is not alone in reassessing its ability to reverse some of the outsourcing activities of the last decades, the pharma industry too is also seeking more manufacturing opportunities at home, with projects such as REMEDIES co-funded by the UK government and industry partners to redesign the UK pharma supply chain."

Supply Chain Visibility Moves up the Management Agenda

There are an increasing list of reasons for Senior Management Teams to understand the risks inherent all tiers of their supply chains.

Intersys was invited to speak at a leading re-insurer's conference on Contingent Business Interruption Insurance (earnings protection against failure of 3rd party dependencies to the layman). The attached paper examines the themes presented; the challenges of End to End Supply Chain Risk Management from the perspective of the manufacturing company.